To improve any area of your business, you need a plan. That also includes your workforce regardless of the type or scale of your business.
Strategic workforce planning is HR-speak for ensuring you have the right person for the job. This means thinking about the skills your team needs to have in the future to meet your business goals.
You need to take several strategic steps to achieve the best workforce and talent. And that’s where strategic workforce planning comes into play.
By the end of this post, you’ll learn the five key steps necessary to succeed in the strategic workforce planning process. While no two businesses are the same, the following guidelines will help you create a workforce plan that works for you.
1. Analyze The Workforce In The Organization
The first critical step in strategic workforce planning is to analyze your current situation. You want to identify your people’s skills, strengths, and weaknesses. That means knowing what strategies are currently boosting your workforce’s performance and how you can capitalize on them.
Three main factors influence strategic workforce planning. They include:
- The Strategic Plan: Start by assessing your current workforce performance, i.e., the efficiency of your staff (good or bad) in meeting your strategic goals. Then identify the steps you need to take to get where you want to be.
- External Factors: Find out the main external drivers affecting your workforce. That includes stuff like remote and hybrid work trends, competition, diversity inclusion, etc.
- Workforce Maintenance: How can you better equip your workforce to improve performance? You could introduce relevant training, better work culture, and other initiatives to boost engagement. Then decide on a program before you can start scaling.
Create an internal survey to measure current employees’ satisfaction. You can use various tools to do this, including Google Forms, TypeForm, SurveyMonkey, etc.
Online tools like these, along with other solutions like CMRs, help modern businesses identify obstacles to their workforces’ ability to meet goals. After pinpointing workforce gaps, there are two areas you need to focus on.
The first is workforce quality which compares your current performance vs future potential. That’s where the terms high performer and potential come from. Some people are outstanding today or expected to be outstanding in the future.
The best talent risk managers use the 9-Box Grid model (featured below) to measure workforce quality.
After your quality assessment, it’s time to check workforce quantity. The personnel flow matrix (featured below) is an effective tool for evaluating workforce quantity. It shows you a summary of new hires, promotions, and employee turnover.
It shows you what’s at risk in your organization and helps you understand your employees’ growth rate.
A great example is Johnson & Johnson personnel flow matrix results. It reveals that 80% of the company’s value came from only 150 employees out of a 30,000-strong workforce. This highlights the 80/20 rule, or the Pareto Principle, which states that 80% of outcomes come from 20% of work.
2. Identify Skills Gaps
The next step is to identify the skills gap. 87% of companies already know, or expect to, have a skills gap in the next few years.
You can use this data to inform future workforce planning strategies.
For instance, skills gap analysis can help you predict when an employee will likely retire. This makes it easy to hire when the time comes. Moreover, you can take time to make well-thought-out decisions.
For example, offering permanent vs project-based employment. Or upskilling your staff vs getting a new hire with the necessary qualifications. And if you opt to go with hiring new employees, you can accelerate the process considerably since you already have the data well in advance.
You can even poach employees from other companies who fit the bill. This can be done by either contacting them directly via platforms like LinkedIn or using a tool like an email finder to get their contact details. This ensures a seamless hiring process that strengthens.
Another thing to consider is the ongoing shift in digitalization and other technological advancements. Unfortunately, these processes often lead to gaps in digital skills that will need to be filled.
A great example is introducing smart tools or applications. That would mean your team needs to undergo training to use them effectively and efficiently for enhanced performance.
Skills gap analysis does not only help with strategic workforce planning. It gives you a bird’s eye view of your entire workforce and improves your recruitment strategy.
3. Anticipate Problems
The next step requires you to make an educated guess. That’s because, according to Murphy’s law, you should always expect something to go wrong.
Effective workforce planning around these surprises allows you to prepare early enough. That means developing actionable steps for when they arise. But to do that, you need to draw from past data to anticipate problems in the future.
By leveraging existing data, it’s easy for you, as part of the Human Resources team, to show leaders how strategic workforce planning can lessen the pressure. Additionally, it helps you set up your workforce for success.
A survey revealed that only 33% of organizations use data effectively in workforce planning.
Beyond internal data, you need to look around you and see how external factors can create problems within your workforce. This includes evaluating things like technology that can impact your organization. For example, the recent rise in AI is sending shockwaves across industries affecting everything from industrial web design and content creation to customer support and even marketing.
The first step in anticipating problems is to understand your current position vs where you want to go.
For example, how many people do you need to finish a project or meet your deadlines? If your organization continues to grow as per your projections, how many will be needed in half a year? Are your workforce projections higher than your current situation? If so, plan around that to ensure you stick to your deadlines.
You should also consider spontaneous massive changes in or around your organization. That includes changes on a global scale, like recessions or economic slowdowns. And technological advancements like automation can have a major impact on your workforce.
That said, it doesn’t mean you have to part ways with everyone affected. And that’s where the power of strategic workforce planning starts to bear fruit. It allows you to devise an action plan of retiring, attrition, or re- and up-skilling to avoid big layoffs in the future.
4. Seek External Advice
There are a lot of pieces in the strategic workforce planning jigsaw puzzle. Seeking external advice is one of the critical pieces. That means taking advantage of any external expert help you can get. You can hire a strategic workforce planning consultant to help you. This is especially critical when creating an actionable and relevant plan for the first time.
Consultants not only give you valuable tips and advice but also help you overcome any roadblocks you encounter when planning. They’ll help narrow down the current workforce issues you’re facing. And will even help you get new hires to meet your current and future business needs.
A third-party operational workforce planning consultant is even more invaluable if you plan to scale globally. That’s because they help you stay compliant with labor laws when hiring.
5. Regularly Test and Monitor Your Plan
The last step of creating your strategic workforce plan is to regularly test and track your plan.
As a project manager, you must track the progress of your projects regularly. Your strategic workforce plan is no different. Regularly testing and monitoring your workforce helps you determine your progress.
You’ll learn about key areas you can improve and pinpoint areas to change in anticipation of future potential issues. That’s because we’re living in a fast-paced business environment. Everything from your consumers and technology to your workforce is evolving.
Moreover, there will likely be unexpected needs and situations that arise—especially when scaling your operations. You may have to revise and restructure your strategic workforce plan when that happens. By focusing on your strategic objectives and growth, you can immediately recognize the moment you go off track.
You can predict the future landscape of your workforce by comparing the expected future workforce formation vs the desired formation:
- The future expected workforce formation is the landscape in 3-5 years. With a personnel flow matrix, you can predict what will happen over time.
- The future desired workforce formation considers external factors that may change the outcome. Automation is an example. As a result, the desired future workforce formation will differ from the expected one.
For instance, the expected workforce formation shows that train drivers will still play a significant role in the next few years. But, because of automation, the demand and role of train drivers will reduce. Anticipating these challenges in the workforce can help you create plans to solve them.
The key to success in strategic workforce planning is balance. That means choosing the right person with the right skill for the right job at the right time. But to actualize this process, you need to follow the five main steps we’ve outlined.
That is, analyzing your situation, identifying skill gaps, and anticipating problems before they arise. Hire an experienced consultant to help you navigate pitfalls if necessary. And with continuous analysis and testing, you will make sure your organization is heading in the right direction.
Using these five easy steps, you can set yourself and your organization up for success with strategic workforce planning.
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